Shifting the Focus from Paradigms to Goals: A New Approach Towards Defining and Assessing Wellbeing

Salvatore Monni and Alessandro Spaventa

No 114, Departmental Working Papers of Economics - University 'Roma Tre' from Department of Economics - University Roma Tre

Abstract: GDP as an indicator is relatively recent. It was introduced seventy years ago and like many other institutions it is an issue of the historical period in which it was created in the years between the Great Depression and World War II. The adoption of the GDP as an indicator is not a neutral choice, but rather the logical consequence of a well-defined theoretical paradigm in which GDP appears the essential tool apt to promote well-being and development. Since then, however, times have changed, new problems have emerged and new theories and approaches have been developed to address them. Starting from these considerations the paper examines the problems connected with adopting an indicator as an absolute measure of progress. Indicators, in fact, are not neutral: they are the result of a specific economic approach; hence they are biased in nature and contribute to define policies that are implemented. After reviewing the main theories and indicators introduced by literature in the last sixty years, we propose to adopt a different approach according to which progress is measured against stated goals and not in absolute terms. Subsequently, we present an example of this approach by introducing a new indicator (ICSES – Index of Competitiveness and Social and Environmental Sustainability) to measure the performance of EU countries vis-à-vis the goals explicitly stated by the European Union.

Keywords: ISES; GDP; Sustainability; Human Development; Wellbeing (search for similar items in EconPapers)
JEL-codes: I3 J16 J21 O15 R1 (search for similar items in EconPapers)
Pages: 25
Date: 2010-04
New Economics Papers: this item is included in nep-env and nep-hap
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